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Saturday, September 25, 2004
Higher tax on imports pushed
MANILA -- With the country in a fiscal crisis, both labor and management are pushing for higher import tax to prevent a worsening of the country's unemployment problem.
Clarence Pascual, a graduate of economics from University of the Philippines (UP) and the current head of the Labor Education and Research Network (Learn), warned of a bad situation if the government will continue to allow imported goods to come into the country with minimal tariff as this will certainly kill the local industry.
Pascual, in his study, revealed that low tariff being imposed by the government on nearly 300 imported commodities is seriously affecting the country's economy.
He said since 1994, the country has been suffering from a fiscal crisis and this was brought about by the failure of the government to collect enough revenues, which is supposed to be the main function of its two collecting arms - the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).
"During the period 1994 to 1997, (low) import duties accounted for the decline in the total revenue effort," Pascual's study read.
He said further that from 1997 to 2003, "local tax revenues accounted for the deterioration in the total revenue effort", however, BOC revenue accounts for the bulk of the loss in total revenue.
Pascual said the imposition of higher import tariff would be the best solution to the country's fiscal crisis and would translate into higher investment, more jobs and better wages.
Using the 2003 import values, Pascual said imposing a three percent import surcharge on non-dutiable imports would raise about P44 billion in revenues for government and this would mean a one percent growth on the Gross Domestic Product (GDP).
If the government would adopt the 1997 tariff rates on dutiable tariffs, the possible earnings would be P64 billion in Customs revenues or an increase of
1.5 percent in the GDP giving the country a total of P108 billion.
"This is equivalent to the estimated revenue intake necessary to stabilize the public debt," the study further read.
Daniel Edralin, national chairman of the Alliance of Progressive Labor (APL) which commissioned the study, said the solution to the country's fiscal crisis are not the new tax measures but the imposition of higher import duties.
"The current crisis is not simply the lack of revenues. The deeper crisis lies in the lack of courage to set out priorities right, to go against conventional wisdom and to find solutions that address the fiscal crisis without sacrificing jobs and incomes," Edralin said.
"Our experience indicates that import liberalization may have worsened unemployment," said Edralin, adding that the move to increase the tariff on import goods would "protect existing jobs and create new ones".
On the other hand, Rene Soriano, president of the Employers Confederation of the Philippines (Ecop) supported the call for the imposition of higher import taes as this will serve as a stop-gap measure to the dying local industry as a result of globalization.
He added that they are not pushing for restrictions on the entry of imports to the local market but what they are asking is to put the tariff imposed in the country on the same level of the World Trade Organizations (WTO) under the General Agreement on Tariffs and Trade (Gatt).
"(What we are asking is) to adjust the level of tariff on goods that are also locally produced to make local products here more competitive (because these will give) protection for locally-produced products and protection for industries," Soriano said.
Donald Dee, spokesman and former president of Ecop said while they agree on increasing the duties on imports, there should be clear programs on how it should be done.
"I can see putting tariff a protection but it must be time-bound and with clear transition programs," Dee said. Marie Neri
(September 25, 2004 issue)
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